Thursday, 2 June 2011

Know What You Sell

An art collector was walking through the streets where lot of art dealers were located, looking for some interesting artifact.

He noticed a pussy cat drinking milk from a bowl on the front-gate of one of the art stores. He found bowl was a very old antique piece and it was a rare artifact with value attached to it.

He asked the owner, "What is the price of the cat ?"
Store owner replied, " Not for sale"

He replied, "I have got a lot of mice in my home, and need a hungry pussy cat to control them. I will pay you 5000 Rupees for the cat."
Store owner said , "Sold." He handed the cat to the art collector. Art collector paid him 5000 Rupees immediately.

Art collector replied, "For 5000 Rupees, I think you should bundle the bowl also. The cat is used to it."
Store owner said, "Sorry buddy, Can not. That is my lucky bowl. So far I have sold 66 cats this week."

A crooked idea to increase sales-Lack of business ethics and negative impact on brand loyalty

There was a toothpaste manufacturing company, and once the senior executives
had gathered for increasing sales. There was brainstorming on different ways by which
they could increase the sales of their tooth-paste tubes.

Some suggested:

Hire a celebrity or any film or sports personality to promote the brand.

Increase cash and other incentives to whole seller and retailer

They could not find any viable solution quickly.

Somewhere
within the meeting, a junior, not-so-important employee came up with a
unique idea. His idea was powerful enough to increase sales without
investing heavily. He suggested that the 'mouth of the tooth-paste tube
be widened to double its current size'. He justified that whenever the
consumer would squeeze the tube, more tooth-paste would flow out from
the tube, which would exhaust it faster and compel the user for a
quicker re-purchase. Thus, the product would start moving faster !

Initially,
some senior scoffed at the idea thinking it was too immature, but later
they realized that it was actually a brilliant suggestion ! The company
went ahead and executed it,...and lo, its sales did increase
substantially !

Now this strategy of the company is excellent and it gave very good results and profit in terms of numerical numbers. But it is a crooked idea devoid of any business ethics.

Consider this:

Sooner or later customers will realize that their tubes of tooth-pastes getting emptied quickly and they are spending more on tooth-paste tubes for a monthly budget. Please do not make a counter-argument that more toothpaste on the brush will result more whiteness of teeth so that even you will not need electricity at night to light up your home and office.

It will create negative impact in the mind of consumer for the brand. Brand is getting stigma of cheater.Since toothpaste purchasing decision of most families are in hand of housewives who literally run the household organization, it is very easy for them to switch brand loyalty. Please note woman are very quick to change their mind,clothes,fashions and in some rare cases husbands, if given the opportunity.

It is a short-term strategy and having long-term negative impact on brand-loyalty.

Other positive competitive brands will rise and will flourish more, when the secret will be discovered.

The right solution would have been:

Make a scheme that if empty tubes of the same brand toothpaste is collected regularly by the family and given to the retailer , say 12 empty toothpaste tubes, customer will be given one tube completely free.

This solution is going to have positive brand impact and will increase customer loyalty and it has the noble concept of ethics that "Never cheat your customer, sooner or later they will find out."